Australian Consumer Law: Analysis Of Chong’s Purchase Agreement With Jason

Issue

Issue 

The issue is if Chong can be considered as a consumer under the ACL, in view of the limit of $40,000.

Rule

The Australian Consumer Law (ACL) is a part of the Competition and Consumer Act, 2010. Earlier, this legislation was present in the form of Trade Practices Act, 1974. The definition of the term consumer has been mentioned in the Australian Consumer Law, chapter 1. According to this definition, a person can be considered as the consumer for the purpose of ACL, if such person has acquired goods or services for a value of less than $40,000.

At the same time, the ACL also provides that a person can be treated as a consumer if such person has acquired goods or services that have a value of more than $40,000, but the goods or services are off the nature that are generally acquired for personal or domestic use or consumption. An example in this regard can be given of a person who has purchased a motor vehicle for using in the transportation of goods on public roads, therefore in such a case, regardless of the price of the vehicle, the person will be treated as a consumer for the purposes of the Australian Consumer Law.

Application 

In this way, it may be surprisingly complex task to define a consumer. But keeping in view the definition of a consumer as mentioned above, broadly speaking, a consumer can be described as a person who has acquired goods or services, and when the price of the goods or services is not more than $40,000, or when the goods or services are the nature that are generally acquired for domestic or personal use.

In this case, Chong is a consumer under the ACL

1. b) Did Jason breach any law when he advertised a used truck as brand new?

Issue

If Jason has breached any provision of law when he mentioned the fast statement in the advertisement?

Rule
According to Australian Consumer Law, businesses are not allowed to make incorrect statements or the statements that may create a false impression. This rule is also applicable to the advertisements issued by the businesses. Similarly, it applies to the packaging of the product and any information given by the business to their staff or online shopping service. This rule is also applicable regarding the statements that have been made by the businesses online or in media like testimonials on their websites or through the social media. For example, a business cannot make the false or misleading claim regarding the value, quality, price or the benefits of the goods provided by it.

Application

While dealing with the question if a particular conduct can be considered to be likely to mislead or deceive, there is a need to consider if the overall impression on the conduct can be described as false or inaccurate. Under these circumstances, in the present case, Jason was involved in false or deceptive conduct that has been prohibited by section 18 of the ACL.

Jason was involved in false or misleading conduct.

1. c) Did Jason breach the law when he included the waiver in the agreement?

Issue

Had Jason breached any law by including the waiver in the agreement without Chong’s knowledge?

Rule

 Rule

The doctrine of unconscionable conduct was primarily designed to uphold equity and fair play. Therefore, unconscionable conduct can be described as unconscionable behavior, which attracts censure and also justifies the grant of relief by the courts to the persons who have suffered as a result of it. The doctrine has been used by the High Court in Blomley v Ryan. Moreover, the validity of this doctrine was strengthened as a result of the decision given in Commercial Bank of Australia Ltd. v Amadio (1983). The court stated that when the stronger party to the transaction takes advantage of the fact that consumer identities not have enough understanding or knowledge regarding the contract or if the consumer cannot make an independent decision, it can be said that the stronger party has taken advantage of the position.

Application

In the present case also, Jason had taken advantage of the fact that Chong did not understanding English language very well. Therefore he had inserted a clause in the contract according to which Chong had waived the protection provided by the statutory guarantees mentioned in the ACL. Therefore, it can be said that Jason was involved in unconscionable conduct.

In the present case, it can be said that Jason was involved in unconscionable conduct.

1. d) Can Jason claim that Chong waived his protection under the statutory guarantees when he signed the purchase agreement?

Issue

Can Chong waive the protection provided by statutory guarantees by including a term in the contract?

Rule

The consumer guarantees that have been mentioned in the ACL have been introduced in place of the implied warranties and conditions that were present in the earlier Trade Practices Act, 1974. The ACL provides that the consumer guarantees are applicable in case of the contracts related to the supply of goods or services to consumer that have been concluded after first January, 2011.

The protection provided by the consumer guarantees apply regardless of the fact if the sale is related goods or services that are generally acquired for domestic or personal use; or if the goods or services are generally acquired for other purposes. However its first case, where certain terms have been implied into a contract by the ACL, a term of the contract that tries to exclude, restrict or modify the protection provided by the consumer guarantees mentioned in the ACL is void and such clause has no effect.

This situation nearly covers all the cases where the consumer is purchasing the goods for personal use. It needs to be noted that the definition of a consumer includes the goods or the services that may be used in context of business, if the price of the goods is less than $40,000. In case of a business sale of goods or services that is covered by the ACL, the law allows the seller to restrict its liability to the cost of repair or replacement of the goods or to resupply the services.

Application

This has been provided by section 64A of the ACL. However, for this purpose, an express provision should be present in the contract formed between the parties. Moreover, the law also requires that under the circumstances, it should be fair and reasonable for the supplier to rely on such exclusion clause. In this regard, onus has been placed on the purchaser to establishing the court that it was not fair and reasonable to do so. Guidance regarding the factors that need to be considered while deciding if reliance on limitation of liability clause can be described as reasonable or not, has been provided by section 64A(4).

Chong cannot waive the protection provided by the consumer guarantees of ACL even if we had signed the contract containing the exclusion clause.

1. e) Has Jason breached any other provisions of the Australian Consumer Law?

Issue

According to section 21, a person (including a corporation) should not involve in conduct that can be described as unconscionable under the circumstances, in context of trade or commerce and related with the supply of goods or services. Therefore, the purpose of this section is to protect the persons however, the definition of consumer mentioned in section 3 of the ACL regarding the consumer guarantees is not applicable.

The protection offered by section 21 is only available regarding the goods or services of the nature that are generally required for domestic or personal use of consumption. The importance of this provision is that the limit of $40,000 is not applicable in this case. Some guidance has been provided by section 21(2) as to what can be considered as unconscionable conduct. Therefore, deciding the meaning of unconscionable conduct has not been left to the provisions of general law. This subsection provides a list of considerations that may be regarded by the court while deciding this issue.

Application

In the present case, it appears that Jason has also breached section 21 of the ACL. As a result, Jason has also breached the provisions related with unconscionable conduct, as provided by section 21 of the ACL.

Jason has also breached section 21 of the ACL related with unconscionable conduct.